Investment Plan for Europe: EUR 420 million for over 2,000 Greek businesses as EIF and Greek banks sign new agreements

Date: 27 April 2017

The European Investment Fund (EIF) has signed four agreements with Alpha Bank and Piraeus Bank in Greece which will provide EUR 420 million to over 2,000 small and medium-sized enterprises (SMEs) across the country. These agreements were made possible by the support of the European Fund for Strategic Investments (EFSI). The EFSI is the central pillar of the European Commission's Investment Plan for Europe, the so-called "Juncker Plan". The Junker Plan is already expected to mobilise over EUR 3 billion in investments in Greece and EUR 183.5 billion across Europe.

Today's agreements will allow both banks to provide loans with substantially reduced collateral requirements under the European Commission’s COSME programme. The banks will also target innovative companies in Greece under the European Commission’s InnovFin – EU Finance for Innovators initiative, backed by the EU's Research and Innovation programme Horizon 2020.

The signing ceremony took place during the conference on financial instruments for the support and growth of SMEs in Greece, organised by the European Commission and the Greek Ministry of Economy & Development in Athens, featuring high-level representatives from the Greek banking and public sector.

European Commissioner, Dimitris Avramopoulos, responsible for Migration, Home Affairs and Citizenship, said: "Facilitating access to finance for small and medium-sized businesses is a crucial element of the European Commission's strategy to promote jobs and growth in Greece and across Europe. Greek small and medium-sized enterprises are already benefiting from loans made possible by the Juncker Plan. Today's agreements will allow some 2,000 more SMEs to finance expansion, innovation and job-creation which will, in turn, contribute to securing Greece's economic recovery.”

Speaking at the signing event in Athens, EIF Chief Executive, Pier Luigi Gilibert, commented: “Today’s EFSI signatures with Alpha Bank and Piraeus Bank re-confirm EIF’s commitment to Greek businesses. In less than a year, EFSI will allow EIF to support a total portfolio of over EUR 1 billion of loans to Greek businesses. Access to finance continues to be a pressing issue for many businesses and the four COSME and InnovFin guarantees will unlock critical investment opportunities for Greek SMEs.”

George C. Aronis, Deputy CEO of Alpha Bank, stated: “The agreements signed today constitute a significant step towards the recovery of Greek entrepreneurship and economy, while further enhancing the long-standing and constructive cooperation between Alpha Bank and the European Investment Fund. Through these agreements, implemented under the European Commission’s COSME and InnovFin programmes, with the support of the European Fund for Strategic Investment, Alpha Bank will provide financing to sustainable and innovative SMEs, with favorable financial terms and reduced collateral, in order to help them meet their operational needs, strengthen their competitiveness and achieve their growth objectives”.

Ilias Milis, Pireaus Bank Senior General Manager, said: “Piraeus Bank, the biggest bank in Greece has set as a primary and strategic goal, the holistic support of Greek entrepreneurship that is considered as the principal force for the reemergence and growth of the Greek economy. Piraeus Bank is expanding its already established cooperation with the European Investment Bank Group, by signing 2 new agreements of a total budget of EUR 270million. These guarantee facilities, COSME and InnovFin, will enhance access to finance for more than 1.000 SMEs and small Midcaps that are active in all business sectors. In particular, through COSME guarantee facility, Piraeus Bank is planning to allocate EUR 170 million to Greek SMEs that represent the backbone of Greek economy, by financing them under more favorable terms. Additionally, EUR 100 million will be dispersed through InnovFin guarantee facility, to innovative SMEs and small Midcaps that invest in research and development and the production of innovative products or services”.

About EIF

The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. More information on EIF's work under the EFSI is available here.

About Alpha Bank

The Alpha Bank Group is one of the leading Groups of the financial sector in Greece. The Group offers a wide range of high-quality financial products and services, including retail banking, SMEs and corporate banking, asset management and private banking, the distribution of insurance products, investment banking, brokerage and real estate management.

The Parent Company and main Bank of the Group is Alpha Bank, which was founded in 1879 by John F. Costopoulos. Alpha Bank, the Bank that inspires confidence and constitutes a consistent point of reference in the Greek banking system, has a wide Network of over 1,000 service points in Greece and one of the highest capital adequacy ratios in Europe.

About Piraeus Bank

Headquartered in Athens, Greece, with approximately 18.1 th employees in 8 countries, Piraeus Bank Group offers a full range of financial products and services to approximately 5.6 million customers. Total assets of the Group amounted to EUR 81.5 billion, net loans to EUR 49.7 billion and customer deposits to EUR 42.4 billion on December 31, 2016.

Founded in 1916, Piraeus Bank operated as a private credit institution for many decades, while it went through a state ownership for the period 1975-1991 until it was privatized in December 1991. Since then, it has rapidly grown in size and activities, representing today the leading Bank in Greece with 31% market share in terms of loans and 29% of deposits.

About COSME

COSME is the EU programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (SMEs) running from 2014 to 2020 with a total budget of EUR 2.3 billion. At least 60% of the programme will be devoted to easing access to finance for SMEs in Europe, with two financial instruments. The COSME Loan Guarantee Facility supports guarantees and counter-guarantees to financial institutions to help them provide more loans and lease finance to SMEs. This facility also includes securitisation of SME debt finance portfolios. The COSME programme also invests through the COSME Equity Facility for Growth in equity funds that provide risk capital to SMEs mainly in the expansion and growth stages. The COSME programme builds on the success of the Competitiveness and Innovation Framework Programme (CIP) (2007-2013) which helped to mobilise more than EUR 21 billion of loans and EUR 3 billion of venture capital to almost 400,000 SMEs in Europe.

The InnovFin SME Guarantee Facility is established under the "EU InnovFin Finance for Innovators" initiative developed under Horizon 2020, the EU Framework Programme for research and Innovation. It provides guarantees and counter-guarantees on debt financing of between EUR 25 000 and EUR 7.5 million in order to improve access to loan finance for innovative small and medium-sized enterprises and small mid-caps (up to 499 employees). The facility is managed by EIF, and is rolled out through financial intermediaries – banks and other financial institutions – in EU Member States and Associated Countries. Under this facility, financial intermediaries are guaranteed by the EU and EIF against a proportion of their losses incurred on the debt financing covered under the facility.

About the Investment Plan for Europe

The Investment Plan for Europe, the so-called Juncker Plan, is one of the European Commission's top priorities. It focuses on boosting investments to create jobs and growth by making smarter use of new and existing financial resources, removing obstacles to investment and providing visibility and technical assistance to investment projects.

The European Fund for Strategic Investments (EFSI) is the central pillar of the Juncker Plan. It provides a first loss guarantee, allowing the EIB to invest in more, often riskier, projects. The EFSI is already showing concrete results. The projects and agreements approved for financing under the EFSI so far are expected to mobilise more than EUR 183 billion in investments and support over 425,000 SMEs across all 28 Member States.

In September 2016, President Juncker proposed to extend the EFSI by increasing its firepower and duration as well as reinforcing its strengths.